UPDATE 1-Exxon to proceed with oil development in Argentina

Published Tue, Jun 11 2019 9:45 AM EDT

(Adds details on project, background)

June 11 (Reuters) - Exxon Mobil Corp said on Tuesday it was going ahead with an oil development project in Argentina that could produce up to 55,000 barrels of oil-equivalent per day (boepd) within five years.

The project will include 90 wells, a central production facility and export infrastructure connected to a pipeline and refineries, the company said.

Exxon began a pilot project in the 99,000-acre Bajo del Choique-La Invernada block, located about 114 miles northwest of Neuquén city, in 2016 after successful results from an initial exploration.

The company's development in Argentina has been slow due to several reasons, including the geographic remoteness of the country from U.S. shale operations as well as government controls on natural gas prices.

However, the country last month awarded permits for hydrocarbon exploration in 18 areas off its southern coast to companies, including Exxon, to boost its reserves, which fell in the last decade due to regulations that discouraged foreign investment in the energy sector.

If the expansion is successful, Exxon said it could invest in a second phase in the block, which would produce up to 75,000 boepd.